Research

Supply Chain

Streamlining Supply Chain Procurement During a Merger or Acquisition

The number of hospitals involved in mergers and acquisitions has skyrocketed in the past decade, growing to 63.2% in 2013, according to the American Hospital Association. Joining with another entity is typically a strategy to lower costs while simultaneously increasing efficiency amid healthcare policy reform. Throughout this process the supply chain, similar to other departments, faces a period of integration after a merge, during which they must iron out differences between the two entities’ supply functions.

Procurement activities in particular demand special attention from the expanded organization. The Academy recently spoke to one health system's system-wide director of supply chain operations to gain some insight on merging two purchasing operations. In the past, the health system has merged with several entities, most recently joining with a regional medical center in 2013.

“We felt there were more economies of scale if we combined our volumes and we could provide more options for our patients,” the system-wide supply chain director says. “It just makes sense for us to work together to better coordinate what we co